How much is Amazon losing? For every unit it sells at 99 cents, it will lose about $7.40, according to Billboard's calculation.

If Amazon sold 300,000 units on Monday, as Billboard estimated, the loss is $2.22 million. But with a second day priced at 99 cents, the album could sell far more copies. If sales reach 400,000 units, Amazon will lose about $2.96 million. (Lady Gaga's label and management have stated that they were not alerted to or involved in Amazon's promotion.)

Amazon will lose money on each 99-cent sale because it is paying Interscope/Universal Music Group the standard rate for each unit sold. The similar title is selling for $11.99 at iTunes. The retailer typically keeps 30% of the sale price, meaning it owes the label and distributor the remaining 70% -- or $8.39.

There's other value in 99-cent MP3 albums. Amazon is an e-commerce giant with highly diversified products and a high average revenue per customer. Amazon also needs to increase its MP3 market share and price is one tool in its toolkit. Even if incremental MP3 sales don't provide a financial windfall, the company has plenty of other products to sell customers who stop by for a cheap album.